The New Global Job Shift

January 31, 2003 5:18 PM

The New Global Job Shift.The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis.
posted by Ty Webb (50 comments total)

Thank you. That is one of the more significant trend pieces I have seen this year.
posted by rudyfink at 5:34 PM on January 31, 2003

Rudyfink, your observation points out just how far behind so-called news journalists are. This was an active topic on my employer-alumni mailing list months and months ago. What we need is to continue finding the next rungs up on an ever taller ladder.
posted by billsaysthis at 5:52 PM on January 31, 2003

Actually, I'm beginning to wonder if the better strategy might not be for US-born workers to head for cheaper pastures. If it's so much cheaper to live in India or Hungary, why not move there?

What's so compelling about living in the US, unless you have very strong family ties keeping you?
posted by gkostolny at 6:05 PM on January 31, 2003

I wish someone would send my job offshore. Like to the Bahamas, or somewhere similar.

Also, gkostolny? Why do you hate America so much?
posted by jonson at 6:12 PM on January 31, 2003

For example, gkostolny, my chances of getting attacked for kissing another man would be much higher in Calcutta.

I think this will probably be a good thing. A little bit of wealth created in areas of intense contemporary poverty. Freeing up the high-dollar people over here to do more interesting things, as well as cheaper stuff for Joe Consumer.

The article was kinda poor, though. "Well, it might be good. It might be bad. Here're some quotes and numbers to note that it's happening. We're not really sure what to make of it, though." Which is valid, but the faux "X and on the other hand Y" silliness got old. Coulda been about half as long.

I found the fact that an entry-level help desk person was making $55k/year, ever, to be rather astonishing. That's a job requiring no more than a highschool diploma.

-K
posted by kavasa at 6:22 PM on January 31, 2003

Freeing up the high-dollar people over here to do more interesting things, as well as cheaper stuff for Joe Consumer.

Like sitting around the house being unemployed? Good thing the stuff is going to be cheaper.
posted by 4easypayments at 6:37 PM on January 31, 2003

This is another case in which I'm more interested in MeFites' reactions to an article than I am interested in the article itself.
posted by Shane at 6:45 PM on January 31, 2003

Fortunately, the world is not zero-sum, 4easypayments.

Some resonances with a Harper's article, Unmade in America, which I've blinked here before -- even though I believe it's far too pessimistic.

There are advantages to an economy when goods and services are available more cheaply. The employees who were engaged in making or doing those things are now available to be redeployed, either by retraining themselves or creating new businesses and products. See also Schumpeter's classic work on creative destruction. Some of them will find themselves better off in the process. Some worse.

This also resonates with the idea that we may be entering a deflationary economy, and ongoing blog discussions about American vs. European productivity. We're still, by far, ahead of all other countries when it comes to worker productivity, and that has been reflected in the economic boom of the 90s, and this soft recession. (Compare with Japan, who have struggled with economic stagnancy for a decade. It's not merely triumphalism that few Americans consider that a likely situation.)
posted by dhartung at 7:05 PM on January 31, 2003

This trend has been going on since telecommunications reform broke open monopolies around the world and made possible affordable global communications starting in the late 1980s. The 1990s were a time of build-up and early adoption and the 2000s will probably be a time of critical mass acceptance.
posted by stbalbach at 7:09 PM on January 31, 2003

While I love Mefi with all my heart ...I find my self often disheartened when these topics come up. I will be graduating with a BS in IT (Web Dev) in just 5 months and reading the conversations and links provided here just makes me want to cry. I have not yet entered the field, merely teaching part-time at a local community college, and my anxiety about my future and the prospects of repaying my student loans grows everyday. I so wish to read some better news here. Isn't there anyone here who has something to say or links that will relieve some of my anguish about the decisions I have made? What advice do you have for someone in my postition. Come on guys please cheer me up!
posted by SweetIceT at 7:20 PM on January 31, 2003

i think part of this has to do with the commoditization of the goods or service an employee is providing. and the employees are pricing themselves out of the market.

years ago the big 3 automakers found that they don't need to spend $100,000 a year for a person to put together when someone in canada and/or mexico will do it for less.

it started happening with programming jobs in the us a few years ago. at one time the best talent in the industry was in the u.s. and at the time the talent could write their own ticket. now, companies can find bright people off shore that can do the same type of work for much less.

i'm not saying it's right but it seems this phenomon is really the same thing we've seen since the beginning of the industrial revolution. machines replaced some people's jobs. some jobs are moved off shore. some jobs just go away.

i just hope my employer never figures out a trained monkey can do my job for free.

-- on preview--

sweeticet my post is pretty doom and gloom but there are two things in your favor:
1) the IT field is not a dinosaur. you'll be able to find a job. in fact you might be able to ride on the next wave... and if you figure out what that is, we're talking bill gates money.

and...
2) hardly anyone i know works in the field of their undergrad degree.
posted by birdherder at 7:26 PM on January 31, 2003

[aside]
One more blogger-blogger referring to themselves as a 'pundit', and I'm climbing up on clocktower.
[/aside]

SweetIceT - you always come over to Korea, like me. Oh, wait, I was supposed to cheer you up, wasn't I? Never mind.

On topic, somewhat, I suspect that dhartung's "there are advantages to an economy when goods and services are available more cheaply" is a bit optimistic, and leads one to ask the question : "Perhaps, but advantages for who?"
posted by stavrosthewonderchicken at 7:27 PM on January 31, 2003

...or 'whom,' maybe. I always screw that one up.
posted by stavrosthewonderchicken at 7:28 PM on January 31, 2003

Isn't there anyone here who has something to say

as a blue-collar worker who has been dealing with
this for the past few decades, let me welcome you to the club.

What advice do you have for someone in my position?

peanut butter, bananas, and pita bread
posted by larry_darrell at 7:38 PM on January 31, 2003

>>On topic, somewhat, I suspect that dhartung's "there are advantages to an economy when goods and services are available more cheaply" is a bit optimistic, and leads one to ask the question : "Perhaps, but advantages for who?"<<

Well, for instance, commercial grade web hosting is now around a hundred dollars a year. Blog software tools are free. Just about anyone can afford it. For the economy as a whole, cheap Internet publishing allows information to flow much more freely than it could pre-Internet. Since information is the raw material of innovation, and innovation is the engine of economic growth, cheap information helps the whole pie get bigger. If the whole pie is bigger, it doesn't matter so much if your share of it is a smaller percent.

It sort of the same argument about VCRs helping, not hurting, the movie industry, only on a global scale.
posted by kewms at 8:09 PM on January 31, 2003

I will be graduating with a BS in IT (Web Dev) in just 5 months ...

You can get a BS in fucking Web Dev? No wonder jobs go overseas.
posted by Ayn Marx at 8:19 PM on January 31, 2003

The BS is in Information Technology my major focus is in Web Development including both Client and Server Side programming etc.
posted by SweetIceT at 8:27 PM on January 31, 2003

I live in Toronto and am doing project management for a project based in Los Angeles, so I guess I can be considered an "offshore worker". I'm sure that I'm probably less expensive than my American counterpart would be, but I'd like to think that that wasn't the primary consideration -- I was hired by someone who knew me, knew my work and was thinking more about "who can get the job done?" rather than "who's cheap?". The Internet just made it possible for each of us to stay in his own city and still collaborate.

Stavros:
I dunno, I think "WonderChickenPundit" has a nice ring to it.

SweetIceT:
birdherder is right -- the IT field isn't a dinosaur. Many of the companies that died were fuelled by technology hype and living on borrowed time, even more borrowed money and no customers (or in the case of Napster, you had a successful product -- in terms of customer acceptance -- but no discernible way to get money from them).

The IT/programming/Web jobs are still out there, they're just not as glamourous as you might have read in "business porn" mags like Fast Company. Most of them, rather than being tech-for-tech's sake, support some enterprise, whether it be a business, a non-profit organization, a government, a hospital or a factory. Bubble or no, there was always a need for balancing the books, counting charitable donations, managing patient records or knowing if it's time to put more Corn Flakes on the grocery shelves. Most of the businesses with these needs have a game plan so fiendishly insane that it eluded the dot-coms: sell stuff or services for money. Nutty!

If you know client- and server-side programming, you should do fine. In the past month, I've been approached to do contract work of that nature by a bank, a organization of financial analysts, an ISP in the States, a place that sells prep guides for tech certification exams and two guys who want to sell medical marijuana seeds online.
posted by AccordionGuy at 9:08 PM on January 31, 2003

It is sad to witness the very things that we now rely on being stripped away from us. I'm not talking about our jobs. Once something's figured out, a monkey can reproduce the steps. No, I'm talking about innovation. The kind of atmosphere that creates instead of replicates. With corporations tightening their grips, every day a little of the individuality and go-get-'em attitude disappears. Every day we lose a little more of what makes us great, and slip slowly towards the mundane. Just about the only thing left to power us is the unrelenting greed of large, impersonal companies. This is truly sad.
posted by Civil_Disobedient at 9:50 PM on January 31, 2003

SweetIceT: Is there still time to move towards getting a CS degree? It seems majoring in IT is a bit more limiting than majoring in CS.

I'm guessing the only really "safe" professions to go into are the ones that erect artificial barriers to keep people out, such as doctors and lawyers. Of course law isn't the most stable profession. Getting a tenure-track position is another way to go but the competition is fierce.
posted by gyc at 10:03 PM on January 31, 2003

Another factor to consider is that more and more people from other countries are considering working in their home countries instead of looking for work in the U.S.. Therefore even though we are losing jobs to other countries not as many people are coming to the U.S. to compete with Americans for jobs here and the net jobs lost might not be as numerous as the numbers would indicate.
posted by gyc at 10:12 PM on January 31, 2003

Good thing the stuff is going to be cheaper.

Maybe some stuff is going to be cheaper. That assumption, however, is built on the assumption that in general, cheaper costs of production will be passed on to consumers. Sometimes, companies just pad their profit margins.

kewms: your example is a really good point, but I don't know if using software (very low cost to reproduce) and especially software that's grown out of Free Software idealogies generalizes well.
posted by namespan at 10:30 PM on January 31, 2003

SweetIceT, the first thing you ought to do is pay off those student loans. Yeah, it's cheap money, and once you get a job you'll want to get things that you couldn't afford in college (like a car that doesn't break down, in my case), but first things first. I just paid minimums on mine, and went out and got a brand-new vehicle and took out a mortgage to buy a house, and now, well...the truck is waiting for me to get a job to go to, and the house is leaning over my shoulder, reminding me that part-time at the community college (I do that too, but i got lucky) isn't gonna cut it. In short, get a job, and pay off them damn loans!
On preview, nice that spellchecker wants to replace "gonna" with "gonad". heh.
posted by notsnot at 10:30 PM on January 31, 2003

namespam - this isn't a case of hypotheticals. Computers from people like Dell are cheaper than even plummeting component prices allow, and support services have only gotten more comprehensive.
posted by kavasa at 10:52 PM on January 31, 2003

I am really appreciating the pep talks here....I am starting to feel better. Yes it is too late for me to switch. I have only 2 classes (besides the two I currently have) to finish. I also have an Associates Degree in computer programming so I am hoping that I can at least show someone out there somewhere that I do have aptitude and they will take a chance and give me a break. I got into computers back in the dark ages (the late 80's) totally as a hobby that I fell in total love with and just couldn't get enough of. I longed back then to find a way to work in this field but the opportunity never arose (until I returned to school 4 long years ago). So for me its not so much about the money. I just love computers and the Internet and its what I really want to do. Thanks for the encouragement everyone.
posted by SweetIceT at 11:19 PM on January 31, 2003

SweetIceT - learn how to bartend. You make good money, it's mostly in cash, you work in a fun, low-stress environment, and with a little bit of seniority you can dictate your schedule so you have plenty of free time to pursue any other things you want (such as artistic endeavours, your tan, or web-dev side jobs)
posted by vito90 at 11:27 PM on January 31, 2003

re Vito's advice--- unless, of course, you live in a state in which you are subjected to second-hand smoke and taxes are legally due on "cash" earned. With the proper grain of salt (and whiskey), vito is otherwise spot on!
posted by G_Ask at 11:43 PM on January 31, 2003

One hesitates to suggest that stavros consider a simpler truism of the Econ 101 variety, involving two makers of widgets in two adjoining towns. Widgets require lots of 100 to be manufactured, otherwise they must be handmade are are prohibitively expensive. Between the two towns, there is only a market for 150 widgets a month. If Alpha Inc. cannot reduce its labor costs, but Bravo Ltd. can, which do you think will continue in business? Of course, this situation is not good for the owner or employees of Alpha Inc. In a zero-sum game, the unemployment of Alpha employees would drive labor costs back down on their side of the river, while the full employment at Bravo would drive labor costs up on theirs. But in the non-zero-sum game that is the real world, the Alpha employees might use their experience building widgets to start a sprocket company. Sprockets, you see, do everything that widgets do, and then some, at half the cost. Not only can the Charlie Sprocket company sell twice as many sprockets as widgets ever sold, they can -- perhaps must -- employ more people to do it, and once again the labor market tightens. Perhaps the Bravo people also go into sprockets, or just make better widgets. Meanwhile, the residents of both towns have a choice of widgets, or sprockets, and both are better, and cheaper, than they were before. And thus is wealth created, more or less out of thin air. Asking who cheaper goods are better for is akin to asking whether the horseless carriage was good for buggy-whip manufacturers. Of course not, but then, do you really think people would -- or should -- stay in buggy whips if there are no more buggies?

Meanwhile, namespan, do you really believe that a company can pad its profits indefinitely, when the company across the street can put them out of business by the simple expedient of padding their profits half as much? Again, Econ 101. If the consumers pay the padded price, it may actually be worth more to them. This is known as letting the market set the price. Alternatively, the vendor may be engaging in branding (making the item seem worth more than it is), marketing (making the price seem better than it is), or exploiting a monopoly position, which is what I suppose you had in mind. Most companies in the real world, of course, would laugh at the idea that they can artificially "pad" profits.
posted by dhartung at 11:45 PM on January 31, 2003

I'm studying for an MA in Economics and a BA in International Relations, focused on East Asian Business, because, as noted, this is where the global growth is right now. Actually, I'm hoping to work with Western companies integrating into China from a legal, economic and also social standpoint; the Indian and Chinese

In any case, here's how I see the situation right now.

1) Prices will go down in the US. Services make up a large part of the operating cost of American companies, simply because the cost of service has not gone down, even when manufacturing costs have. Service is to business as the housing market is to consumers, if that makes sense.

2) Overseas students are becoming both a) more educated and b) more willing to stay and work at home because intl. wages are increasing. Many parts of Asia, including China and India, have seen growth rates approaching 10% per year over the last decade, as well as relaxations on government strictness and ever increasing global political stability and standardization. As noted, many of these jobs are not moving; it's more the workers that are. The Indians working in Bangalore IT are mainly the Indians that would have been working in Silicon Valley IT and immigrating to the US.

3) The US economy will not be decimated; many jobs still need to be done in the US, and many others will stay in the US as the cost of going overseas continues to rise and rise (due to strong growth rates). There are very few serious economists who see trade as a bad thing - even Stiglitz, I believe, said recently that protectionism is "the most inefficient way to redistribute income known to man."

4) Here's what we'll being to see in the future from a political economy standpoint; more global stability, since companies overseas don't want war where they're operating. Basically, the stakes are increased for the US and Europe if, say, India and Pakistan are on the brink as in last year. Second, there will be less restrictive borders - the competition will be regional for workers, not national. That is, a company moving to Mexico or India will be seen the same as them moving, for instance, from Florida to Maine. Further, global wages will equalize as education and skill levels improve around the world. This has many benefits for Americans, specifically in the form of lower housing costs, which I feel are in a ridiculous bubble right now, nearly equivalent to the Japanese land price bubble of the 80's (though our economy overall is in much better shape).
posted by Kevs at 11:51 PM on January 31, 2003

I bow, as always, to dhartung's patience with those of us unblessed with greater learning, and thank him for taking the time to educate.

However, I am almost completely at a loss in trying to relate his amusing little parable of widgets and sprockets to the realities of the world in which we live. This, of course, is a failing in my understanding, rather than any lack of convincing arguments on his part.

I invite him to apply his Econ 101 musings to a real-world situation in which I have personal interest :

Until the early 90's, Busan (aka Pusan), the second biggest city in Korea, was the 'sneaker capital of the world.' Nike, Reebok, and all the other big brands had factories there, as did a few domestic companies. Koreans provided the semi-skilled labour, at bargain basement prices. This made the corporations happy, as they could get rid of all their expensive American employees, and lower costs (thus enhancing shareholder value or paying CEO salaries or funding yet more marketing or whatever).

Unfortunately, though, Korean labour began to get more expensive, and soon had priced itself out of the market. Thank god, though, there were people in China and the Philippines and Thailand and Indonesia who were willing to work for much, much less, regardless of how dangerous or destructive to their lives such work might be. Anyone who has read a little about the conditions such workers endure in the 'special trade zones' knows all about this.

The Koreans kept themselves in the loop, though, as the middlemen. The big shoemakers simply offer a contract, and the Korean middlemen compete to offer the cheapest tender, by whatever means possible (which translates to starvation wages, 24 hour shifts, virtual indenturement, and so on, on the factory floors in SE Asia). This lowering of costs for the big transnationals doesn't seem to translate to lower prices for consumers, though, oddly. Certainly not enough to compensate for the loss of thousands of jobs by Americans that arose from moving manufacturing in the first place. Putting the squeeze on also narrowed the margins for the middlemen in Korea, on top of the loss of manufacturing jobs that came as a result of 'cost-cutting' initiatives from the transnationals.

And for the poor fuckers making a buck a day in the factory (when a buck a day is often not enough to live on)? Well, tough shit. The rapacious, greedy fucking Americans got their goddamn sneakers for a reasonable price, at least. Who wins? The corporations, certainly, and in a very narrowminded sense, the American consumers, too, in the short term at least.

When I asked who receives the advantages, Dan, I wasn't asking which group of Americans benefits. Fuck America, and fuck the mindset that values products over people, cheapness over fairness, and Americans over anyone else on the planet.

The arrogance of your 'now, silly boy, let me educate you' response underscores my point pretty nicely, so perhaps I'll just leave it at that.

(apologies for the length)
posted by stavrosthewonderchicken at 12:27 AM on February 1, 2003

(...and for getting ranty. I do need to watch that.)
posted by stavrosthewonderchicken at 12:44 AM on February 1, 2003

That "global wages wil equalize" sounds to me like 40 million Americans are about to get a big fat permanent pay cut.

It also sounds like maintaining a middle class lifestyle on our new global equalized wages is going to result in some American workers moving to countries with lower costs of living.

I forecast a shitload of Rush Limbaugh listeners filled with a righteous anger and looking to kick someone in the nuts.
posted by dglynn at 12:47 AM on February 1, 2003

stavros, my model used just two towns to represent the whole of the world. It's a pretty standard economic metaphor; something like it is in every first chapter of every economic textbook on the planet. If you saw me as pretending that underpaid Korean labor magically and invisibly provided the better life for the people that you, stavros, saw as Americans, that is a problem with your view of the economic model, and not me. Or maybe your view of Americans. Or maybe your view of me.

And for the record, I have, at this time, an intimate knowledge of economic dislocation. So stuff your stilted assumptions back where they came from.

My advice for Busan? They can't compete on labor price, that's for sure. So they'll have to compete on other terms -- quality, innovation, brand identity, the usual suspects. Maybe they could consider applying their manufacturing expertise to something less labor-intensive, and price sensitive, than shoes. Maybe they should emigrate someplace where labor conditions are better. Is that tougher? Sure. Did I make up the rules of life? No.

So fuck your idea of 'fair' prices. People won't pay them. Fuck your idea of 'people over products', whatever that means, because the real world is, alas, merciless. Fuck your personalization of this issue, because I did not make up labor elasticity this morning just to give you the business, and if you'd learn something about it, maybe you'd stop reflexively blaming Americans, "transnationals", shareholders, and/or CEOs, as if they are the only thinking actors on the planet, responsible for the fates good or bad of everyone else. It's an incredible intellectual cop-out.
posted by dhartung at 1:26 AM on February 1, 2003

No, amigo, it's reality, and it's everywhere. The axis of evil, indeed.

If ostensibly smart people like you would pull their heads out and stop being apologists for the lucre-worshipping scum that run your nation, perhaps there'd be a chance that fewer people'd be starving and dying elsewhere as a result.

Busan's doing just fine these days - they've bootstrapped themselves, as the Koreans always have done. Even without your sage advice. They did pretty damn well off the yanks, for that matter, and have done well to transition away from manufacturing (or to manufacturing higher-value items) in the past decade. Others, in other places, are not nearly so lucky, at least not yet, and the systems that have been put into place to ensure that that continues are as much the responsibility of the nasty-ass Korean middlemen as they are the factory owners in SE Asia as they the corporates in the States. I loathe what the Americans have done to the world, honestly, but it's not like most of the victims haven't been willing and complicit. Or at least their governments and corporations have greeted the dollar-toting yanks with legs widespread, which has had the same result in the end : the country gets fucked.

I don't pine for some mythical worker's paradise where everyone is free and happy. The world is a much harder place than us comparatively rich western types can understand. I'm aware of, and have seen firsthand (which you may have as well, and simply turned a blind eye, I don't know) the consequences of these sorts of things, all over the third world, over the years. It's not going to end any time soon, the nightmare that the majority of people on this planet live on a daily basis. I don't think there will ever come a time when the shitbeasts in America (and other rich nations, let it be said) will focus on anything but maximizing their profits at the expense of the livelihoods of the very people they're trying to sell to, and letting the chips fall where they may.

I'm sorry to hear you've got an intimate knowledge of economic dislocation. Join the freaking club. You've got time to sit in front of the computer and argue with ghosts, and so have I, so we're not that bad off now, are we? What is surprising to me is that you are so willing to continue quoting the same wrongheaded platitudes that have broken the lives of so many, nonetheless. Not very clever, perhaps, but that's your business.

Your accusation to the contrary, I didn't think I had personalized this difference of opinion, dhartung. If I'd said fuck you, perhaps that would have been the case, but I didn't. Pedantic as you can be, I respect the level of intelligence that you often bring to a thread.

But I still say fuck America and the dollar-dazed whores that run it. I can respect your right to argue the opposite, even if you are smarmy and insulting in doing so, while thinking the argument is a foolish one.

if you'd learn something about it

Why should I need to, when you're so willing (no, desperate) to share your boundless, ocean-deep pools of knowledge with us here?
posted by stavrosthewonderchicken at 2:08 AM on February 1, 2003

Whew - hot topic.

I work in sales for a large western IT services company - selling systems support deals. Late last night we finished a proposal that will shift hundreds of western jobs "offshore", and cut the clients support costs by about 70%.

Every single large deal we're working on now has a major offshore element - which usually means shipping jobs out of the US and Europe to India, or other low cost centres. Our customers are driving this, by going direct to the offshore companies themselves to find new ways to cut costs. This has forced the western companies to react.

Every deal does have a "local" element, because the customer always wants some presence to deal with local issues, to manage the account, to hold their hand basically. If you're working in IT (in the west) and have the option to switch into account or relationship management (or sales) I'd recommend you do it fast. The offshore based companies are also recruiting hard for people to carry out those roles for them in the west.
posted by Raindog at 3:34 AM on February 1, 2003

I wonder how many IT companies will have that decision turn around and bite them in the ass, though, Raindog. It may have been an exceptional thing, but a few years back I was working at a multinational IT house. They farmed out the dev work on their core product line to India the year before I got there. Several years later, and several million dollars later, and several years after delivery was due, no saleable software had been delivered, and it was panic stations all 'round, with heads rolling, as the management searched in vain for some way to plug the gaping hole in their product line.

That was probably due as much to bad management as anything else, but it set me to wondering about the wisdom of sending IT dev work overseas along with the manufacturing....
posted by stavrosthewonderchicken at 3:48 AM on February 1, 2003

Savrosthewonderchicken - well said.
posted by Civil_Disobedient at 5:55 AM on February 1, 2003

stavros - I guess it's horror stories like that that are making companies wary about contracting directly offshore, and instead looking to the global IT suppliers who can provide some clearly positioned local butt to kick.

(damn - finding it hard to get out of sales pitch mode here after a long week...)
posted by Raindog at 7:48 AM on February 1, 2003

>>Others, in other places, are not nearly so lucky, at least not yet, and the systems that have been put into place to ensure that that continues are as much the responsibility of the nasty-ass Korean middlemen as they are the factory owners in SE Asia as they the corporates in the States.<<

Yes, exactly. The reason why labor costs are higher in the States is that workers in the US have (at least relative to SE Asia) better working conditions and higher wages, which they got by unionizing, demanding better conditions, and getting worker protections enshrined in law. SE Asian governments and factory owners tend to collaborate in crushing attempts to organize labor there, much as the US government and factory owners did a hundred years ago.

It's an ugly situation, but what can I, as an average American consumer, do about it? And yes, that's a serious question, not an excuse to stick my head in the sand. What concrete steps can I personally take to improve working conditions in SE Asia?
posted by kewms at 8:17 AM on February 1, 2003

I think the point of workforces in Asia capable of doing IT development work is that it's a new external(to the US) market force that will apply downward pressure on wages in IT in the American market. In other words, IT wages can be expected to decrease over time here in the states.

And the same forces certainly will apply to other white collar job markets in the US also. Jobs in these markets in the US will not go away, but between surpluses of workers due to decreases in the total amount of work done here, and wage pressure for the same work, people in the "exportable" fields are likely to see fewer jobs for less money.

Brad DeLong recently speculated that the world will get richer faster, and the bulk of the benefits will go to the poor and middle class in the developing world.

It just seems logical that the US job market is going to price certain work lower, and that is going to translate into hard times for certain segments of the US workforce. The fact that those segments of the workforce have traditionally been shielded from the pressures of globalization will make for an interesting political twist in the coming years. Expect to hear whole classes of people in the US lamenting "white collar work at blue collar wages".

I expect that will play hell with some people's plans for paying off student loans.
posted by dglynn at 10:42 AM on February 1, 2003

The U.S. based technology consulting firm I work for recently lost a bid on a major software development project to an offshore Indian firm. And the client is a U.S. union! An organization committed to preserving U.S. jobs shipping U.S. jobs overseas.

Very interesting that many of the principals in this firms came to the U.S. for advanced degrees, and then leveraged their relationships in their home countries to serve as their cheap labor pool.
posted by scottfree at 10:56 AM on February 1, 2003

Additionally many of the Indians I work with in Silicon Valley are first rate software engineers. As I have become friends with many I have seen a pattern that many are here to make some high paying $$$ and then return to India for early retirement. I was surprised to find out that that can be done by banking as little as $100K! One of my colleague's goals is to return to India and retire at the ripe old age of 45. Nice to have that sort of purchasing power. Though by that time cost of living in India may make that $100K not worth quite as much.
posted by scottfree at 11:09 AM on February 1, 2003

Brad DeLong recently speculated that the world will get richer faster, and the bulk of the benefits will go to the poor and middle class in the developing world.

That's true. These white-collar jobs will help third-world countries improve much faster than the sweatshops they have now. Like people say, information wants to be free, and the know-how to do these jobs are no longer concentrated in the West. I guess this trend is a bit like environmentalism: in the present and near future we're going to have to suffer a bit and make some sacrifices, but in the end the future generations around the world will be better off.
posted by gyc at 12:14 PM on February 1, 2003

stavros, you have a highly emotionalized conception of economics, a cartoon of blame, luck, and greed. This doesn't honestly represent the people who I know. You also have it in for Americans, the psychology of which I won't begin to unscrew. It's your business, and I don't expect you to change. But please, in turn, don't assume that I "turn a blind eye" to suffering because I don't agree with your politics. It's really pretty offensive.
posted by dhartung at 2:59 PM on February 1, 2003

Not pointing a finger in either direction but:

TCS: Economic Idiotarianism
posted by billsaysthis at 6:21 PM on February 1, 2003

Meanwhile, namespan, do you really believe that a company can pad its profits indefinitely, when the company across the street can put them out of business by the simple expedient of padding their profits half as much? Again, Econ 101. If the consumers pay the padded price, it may actually be worth more to them. This is known as letting the market set the price.

Sometimes it's also known as price fixing -- but it's OK, because apparently customers really felt so good about CD prices at the time that they don't really want their share of the settlement.

Econ 101 says that companies will seek to maximize profits subject to constraints, and consumers will seek to maximize utility subject to constraints. One possible result of this is, yes, a competetive market where prices are driven to an optimal equilibrium. But even simplified neoclassical economics isn't so naive as to suggest this is the only outcome.... what happens in a a monopole-centered market was discussed in my 101, class for example. And neoclassical econ -- while based one of my favorite branches of math, game theory -- clearly makes naive assumptions pretty much throughout the typical undergraduate coursework. My limited exposure the graduate level leads me to believe that the just formalize many of these naive assumptions.

I'm not saying modern econ is a total bust, or that markets don't work sometime. The PC industry seems like a pretty clear instance of success to me. Compact Discs seem like a pretty clear instance of... well, maybe not market failure, but of market actions that don't track undergrad econ theory well, because it doesn't spend much time discussing what happens when all major players in a market collude. Which has been known to happen.
posted by namespan at 7:06 PM on February 1, 2003

dhartung, you have a highly stylized conception of economics, a cartoon of wishful thinking, mock-altruism, and oversimplification. This doesn't honestly represent the people who I know. You also have an investment in the status quo, the psychology of which I won't begin to unscrew. It's your business, and I don't expect you to change. But please, in turn, don't accuse me of a lack of understanding of the issues because I don't agree with your politics. It's really pretty offensive.
posted by stavrosthewonderchicken at 7:31 PM on February 1, 2003

do you really believe that a company can pad its profits indefinitely, when the company across the street can put them out of business by the simple expedient of padding their profits half as much?

Yes. All they have to do is redirect a very tiny slice of those profits into lobbying, and their profts will be protected forever as a matter of law. See RIAA. See Disney. See ADM.
posted by George_Spiggott at 8:19 PM on February 1, 2003

WOW! A heated post. My 2$ (gee - where did the "cents" key on my keyboard go?) ------- globalization will lead to the rapid decline of the current leading industrialized world middle classes - the middle classes of the US, the EU nations, Japan, etc, - with a corresponding, mirror rise of somewhat less affluent middle classes in the developing world. The wealthy elites around the world will benefit most from these economic shifts, for they are the ones who are negotiating the terms - the individual contracts, and the overall terms of globalization.

BUT.......we may well expect a sort of "acting" out, on the part of certain currently leading industrial nations as their middle classes begin to realize their fate.....

In the backdrop, also, is accelerating global environmental decay and, also, the "Singularity"...... and before this occurs we will, of course, witness the emergence of "Gattaca'd" super-elites.............*yawn* if only for something unexpected...alien landings, perhaps...
posted by troutfishing at 8:55 PM on February 1, 2003

Ty Webb - I forgot to mention: Great link!
posted by troutfishing at 7:39 AM on February 2, 2003